The Obama administration on Tuesday formally challenged a court order barring the federal government from funding human embryonic stem cell research.

The Justice Department asked U.S. District Judge Royce Lamberth to suspend a temporary injunction he issued last week blocking the funding and filed a notice of plans to appeal the decision to the U.S. Court of Appeals. Lamberth, ruling in a lawsuit filed by two researchers working on alternatives to the cells, said the funding violated a federal rule that prohibits federal tax money from being used for research that involves the destruction of human embryos.

“The government is seeking a stay of the court’s injunction to prevent the irreparable harm and financial harm that could occur if these lifesaving research projects are forced to abruptly shut down,” Justice Department spokesperson Tracy Schmaler said in a statement. “The great potential for significant additional medical breakthroughs is at risk if this research is halted pending the appeals process.”

Lamberth’s injunction “causes irrevocable harm to the millions of extremely sick or injured people who stand to benefit from continuing research, as well as taxpayers who have already spent hundreds of millions of dollars on this research through public funding of projcts which will not be forced to shut down,” she said.

In a declaration filed with the notice, National Institutes of Health Director Francis Collins said the NIH had invested more than $546 million in the research since 2001 and that therefore the “anticipated financial loss to NIH and the taxpaying public is enormous and would include the hundreds of millions already spent on on interrupted projects and the administative costs of shutting down and restarting the NIH funding, Schmaler said.

The court order prevents the NIH from providing $54 million to 24 projects already underway that were expecting to be renewed by the end of September, Collins said. The projects include one aimed at developing “life-saving therapeutic strategies” in Massachusetts, a possible source of liver cells for transplantation in Pennsylvania and a method to more efficiently turn the cells in a variety of tissues, including lung, liver, pancreas and intestine, in Ohio, she said.

Another 199 grants would also be discontinued, resulting in the loss of more than 1,300 full- or part-time jobs, Collins said. In addition, $270 million that has already been spent on these grants “will have been wasted as investigators and labs can neither finish their curent projects nor pursue what has been learned,” the statement said.

By Rob Stein | August 31, 2010; 3:16 PM ET